Paying for No Paycheck : Job Seekers Lose Millions to Firms That Promise Work

Unscrupulous operators charging exorbitant fees for worthless employment information are increasingly preying on the jobless, reaping millions of dollars through increasingly sophisticated job scams, employment experts say.

The sluggish economy, high unemployment rate and lack of job opportunities in this country make many people particularly vulnerable.

In one popular type of scam, thousands of desperate job seekers are being persuaded to send as much as $1,200 to “employment listing services” that guarantee high-paying work in far-away locales such as Australia or New Zealand, experts say. Usually, no such jobs exist, and victims can’t get their money back.

“I told them that I don’t have much money and that I have a family, so I really needed to know that I wasn’t going to lose this,” says Joe Borges, an Artesia-based job scam victim. “They said, ‘Don’t worry. If you’re not satisfied, we’ll refund your money.’ ”

Although no one has precise statistics about how many people have been taken, the Council of Better Business Bureaus in Arlington, Va., says inquiries about job listing services have soared to about 37,300 in 1991, versus 20,300 in 1990.

Current-year statistics are not yet available, council spokeswoman Diane Ward says. She notes that a lot of people who get taken don’t report it, in some cases out of fear of looking stupid.

Job scams are not new, but amid today’s high unemployment they are costing victims increasing sums of money, experts say.

The way these listing services operate is simple. They run advertisements in daily newspapers and on local television stations promising high-paying positions in virtually any field.

“Job opportunities overseas!” one such advertisement proclaims. “Travel, housing and medical expenses paid! Earn up to $70,000 tax-free!”

Job seekers are told to call a number, where they can get further information. That number will either lead them to a second, pay-per-call number, or they’ll get a live operator who tells them that they must send an upfront fee to get job lists.

If job lists do arrive, they usually consist of outdated classified advertisements--some are several years old. International job scams also sometimes include travel brochures that talk about living conditions in the targeted locale.

Many of these listing services “guarantee” a job or your money back. But when consumers actually try to collect, the listing service disappears or comes up with a laundry list of restrictions to get the refund.

Generally speaking, neither the jobs nor the refunds ever materialize.

One of the most popular scams promises lucrative positions in Australia, Ward says. Consumers who send $99 or more get some accurate information about Australian living conditions and emigration requirements, as well as a list of companies that are supposedly looking for workers.

Are these companies really hiring? The Australian Embassy, and many employers, respond emphatically: “No!”

Trans World Airlines’ Sydney office, which has three workers, says it has received over 500 job applications from U.S. residents. The company has no job openings.

Champion Spark Plug’s Australian operation says it has received about 400 applications, including one from a performing clown. It also has no positions available.

Merrill Lynch in Melbourne has received dozens of applications for nonexistent positions. Merrill Lynch notes that applicants, who say they’ve received information about the “openings” through U.S. job listing services, have addressed their mail to a Merrill office that closed seven years ago.

In reality, the employment situation in Australia is bleak, officials say. The nation, which is suffering through a serious recession, has an 11% unemployment rate, says Christopher Sweeney, council for public affairs at the Australian Embassy in Washington.

There may be some opportunities for skilled computer engineers and sophisticated financial experts, he adds. But there is no work for truck drivers, gardeners or construction workers--despite the promises of these listing services.

Of course, the Australia scam isn’t the only one going. Job listing services, which operate nationwide, also promise jobs in the United States, Eastern Europe, Middle East and even in Martinique, a French-owned island in the West Indies.

“I got a call this morning from a guy who says a job listing company told him there’s demand for heavy equipment operators in Martinique. They want him to send $300 and a resume,” the Better Business Bureaus’ Ward says. “I talked to him for some time, but it still sounds good to him.”

The French Embassy reports that Martinique’s high domestic unemployment rate makes it unlikely that foreigners would be able to secure employment on the island.

“We can’t just say outright that no one has ever gotten a job through one of these services,” Ward adds. “But it certainly fits the pattern that we’ve seen before.”

How to Spot Job Scams

How do you differentiate bogus job listing companies from legitimate employment agencies that help people find work overseas? Here are the telltale signs of job scams:

Upfront fees. Most legitimate employment services only charge fees after you get a job. And frequently it’s the employer who pays, not the employee.

Business only by mail. Where most employment agencies require you to come in for an in-person interview, scam artists rarely take the time. Instead, they want you to mail your resume--and fee, of course--often to a post office box address. That way they get your money and you don’t know where to find them.

Vague promises. Employment agencies are usually contacted by employers who have specific job openings. If the firm you’re talking to can’t give you job descriptions, experience requirements and names of specific employers, you may have a problem.

Worthless guarantees. Some listing services say they’ll refund your money if you don’t get a job. But once you read the fine print, you find the requirements to get the refund are virtually impossible to fulfill. Also, remember that a guarantee is only as good as the company that issued it.

Outdated information. Some people who are looking for work in distant cities may benefit from listing services that simply provide classified advertisements from local newspapers--stock in trade for some employment listing services. However, if this is the service you’re looking for, make sure the company provides current information. Ask how frequently their information is updated. And see if they’ll give you references--names and numbers of people who have actually found employment through their service.